Question

Choose a company you are familiar with and diagram its supply chain. For each entity in the supply chain, identify one or two specific decisions that might affect other members of the supply chain.

Answer 1

The company I chose to demonstrate the supply chain is 'Coca Cola' because it is one of the globally well known company with it's diversely known products and also beacuse it's a manufacturing company.

Introduction about Coca Cola: Coca Cola was first invented in 1886 by a Pharmsist. It's head quarters is located in Atlanat, Georgia. It currently offers more than 500 brands in over 200 countries. It's stock is listed in NYSE.

Supply Chain Management: The purpose of choosing a manufacturing company to explain Supply chain is because it is easy to understand the suply chain of a company which is part of our daily life and also most of us have a common idea about what is the basic supply chain of a manufacturing company.

Coca cola's supply chain is as common as any other beverage manufaturer, distributor or retailer. In general, the supply chain of a company are classfied as following activities.

1) Upstream/Inbound activities: Upstream activities are related to activities like manufacturing the concentrate by procuring the required raw materials from suppliers. In Coco Cola, the secret recipe of the concentrate is very tightly held secret. That is why they didn't even had a patent registered for that. Upstream activities generally relate to the activities that add value to the product that a comapny manufactures.

2) Downstream activities: Downstream activities of CocaCola includes distribution of the Concentrate to the most dense territories i.e., where it's market is high through a franchised distribution system.

3) Operations/Support activities: Operation activities include bottling of the concentrate and then distriiuting to various markets.

Simply, the Coco Cola in Atlanta manufactures the concentrate and distributes it to one of it's sub unit which is responsible for disbribution in North America. Then the sub unit will bottle the concentrate through various bottlers and will distribute it to units in it's region. Supply chain of Coca Cola will be better understood with the following diagram.

The following example will explain how a critical decision taken at one stage of supply chain that will affect other members or stages. For example, let us say that a particular material X is required for manufacturing the concentrate by Coca Cola which is being procured from an outsourcer. Due to external factors, the outsourcer increased the price of material X and the management of Coca Cola decided that Material X will be manufactured by Coca Cola itself instead of procuring it from outside. This decision of Coca Cola's management will affect every stage of supply chain. Manufacturing material X require additional capital for new plant & machinery and also working capital which might affect resource allocation at various stages. It require additional labour force also. Installing and manufacturing material X might delay the manufacturing of Concentrate in the initial stages which will affect the whole supply chain.